Some customers using the Maryland Auto Insurance Fund have to take out loans from premium finance companies to pay the steep cost of the insurance, and a new lawsuit is claiming some people are being overcharged.

The Maryland Auto Insurance Fund provides insurance for Marylanders who have poor driving records and are denied insurance coverage in the private market, but often those fees are high and they have to be paid all at once up front.

Drivers who can't afford to pay the MAIF premium all at once end up getting loans from premium finance companies that can be paid back in installments, but it ends up costing a lot more.

Clay Teunis works from home recording books on tape. He said it's easier for him since he chose to get off the road.

"I sold my truck and turned in my tags. No more driving," he told 11 News I-Team reporter Lisa Robinson.

By his own admission, Teunis' driving record is severely tarnished. He racked up so many points he had to get insurance through MAIF.

"I got what insurance I could get," said Teunis, who had to pay $2,300 per year up front for MAIF insurance. He eventually had to get a loan from one of those premium finance companies to the tune of more than $3,500 a year.

Before long, he said he fell behind on the payments, so the premium finance company, U.S. Capital Associates, canceled his policy with MAIF. Now he claims that U.S. Capital charged illegal and excessive finance charges and fees.

Teunis and two other plaintiffs are being represented by attorney Alex Brown, who filed a class-action lawsuit in August against U.S. Capital and 15 other premium finance companies.

"We're suing them because they're taking advantage of the people who are least capable of protecting themselves," Brown said.

Court makes ruling, but is it far enough?

In December 2011, the Maryland Court of Appeals decided that the state's largest premium finance companies were engaging in illegal financing practices. The court ordered the companies to refund overpayments of interest to their customers by July 2013.

But Brown said the court didn't go far enough in protecting consumers.

"They're being sold things they shouldn't be sold, charged fees that statutes prohibit them from being charged, and the premium finance companies are delaying repayment of proceeds in order to improperly collect interest," Brown said.

The premium finance companies declined on-camera interviews with 11 News but called the lawsuit totally unnecessary. They said they had already agreed to refund any customers' due refunds before the lawsuit was filed. Their attorney, James Ulwick, provided a statement to 11 News, saying, "The lawyers amended the complaint after it was filed to add three customers as plaintiffs."

The statement continued, "The Maryland Insurance Commission, prior to the filing of the lawsuit, determined that one (plaintiff) has been fully repaid and the other in fact owes the defendant premium finance company money. For these and other reasons, the companies will be moving to dismiss the suit and fully expect that the case will be thrown out of court."

Brown said that statement only responds to the issue of overcharging interest and ignores other alleged misconduct. As for Teunis, he said he's itching to drive.

"I really do miss driving. If I were to get behind the wheel now, I would be a lot more of a mature driver, but I don't know because I just can't do it," he said.

Teunis said he's not willing to pay the hefty price for the privilege.